Connecting with influence

Yet first jobs can teach people essential skills like how to turn up to work on time, work alongside a team or communicate effectively.

McDonald’s UK, which creates 10,000 first job opportunities every year, recognises the contribution of these so-called soft skills to its business, but it is also aware of their value to the wider British economy, particularly financial services and retail.

Indeed, research commissioned by the fast food company calculates that soft skills are worth more than £88 billion to the British economy every year, and could potentially contribute £109 billion by 2020 and more than £127 billion within ten years.

But it also revealed that, by 2020, 535,000 British workers will be significantly held back by their lack of soft skills, which will have an impact on economic output.

That is why in January McDonald’s UK, which is the country’s largest employer of under 24s, launched a campaign to promote soft skills and support young people, in particular, in their efforts to gain them.

Selena Callas, director at Blue Rubicon, who worked on the campaign, cites McDonald’s approach as an excellent example of how to turn your stakeholders into advocates.

So what is a stakeholder?

Jonathan Jordan, founder of Sermelo corporate advisory firm, puts it succinctly. ‘A stakeholder is someone who has the choice to support or disrupt your business. You need to mitigate the possibility for disruption and offer the opportunity to support,’ he says.

Traditionally, stakeholders included media commentators, unions, MPs and industry associations. Today, the definition of a stakeholder is somewhat wider to encompass employees, regulators, think tanks, NGOs and community groups.

Until recently, stakeholder engagement was seen as a nice-to-have, rather than something that was necessary to help the business meet its operational and commercial goals.

But the commercial landscape is changing and tolerance of businesses that act without regard to others is low. If a business does not behave well, its licence to operate can literally be removed.

Allison Bartlett, head of external communications at McDonald's UK, who masterminded the campaign, says that in choosing to promote soft skills the company wanted to both challenge perceptions of its business and also develop a campaign that would resonate with other businesses, that wasn’t solely beneficial to their own company.

When the campaign was launched, no fewer than 70 organisations, including Barclays, the CBI, the Department of Work and Pensions, AON and Tesco, asked to partner the fast food group.

The campaign is also being promoted internally, with events and activities for McDonald’s staff. ‘We want our people to feel pride in themselves and their job, so that is why we are talking about the value of these skills,’ Bartlett says.

Callas says: ‘Lots of organisations are recognising that they need to have a stakeholder strategy and it has become ever more important over the last three years, because of the decline in trust in business.

‘Stakeholders are more informed and the rise of social media means there are more opportunities for people to voice their opinions. We have seen how fast organisations can mobilise support with fracking in the UK.’

In some sectors, such as energy, transport, tobacco and housebuilding, regulation and interference from state or local authorities can have a huge cost on business. America’s National Association of Manufacturers recently estimated that the annual cost of federal regulation to businesses was more than $2 trillion, roughly equivalent to the gross domestic product of Italy, which translates into $9,991 per employee per annum.

Three years ago, BG Group was forced to abandon plans to build a liquefied natural plant at Brindisi in Puglia, Southern Italy, which would have created hundreds of jobs in the local community, after trying in vain for 11 years to acquire the necessary permits from the authorities.

The company had spent Eu250 million on developing the project but was thwarted by Italian bureaucracy and campaigns by local environment groups. Misjudging stakeholders, it seems, can be very costly.

Kevin Groves, director of communications at Network Rail, a company rarely far from a crisis, says that a stakeholder audit, leading to a matrix of engagement, is fundamental for an organisation as large as his.

‘There are only four constituencies in the country that railways don’t go through. Our stakeholders are most local authorities, government, the Department for Transport, lots of third party funders, passengers, our neighbours – 22 million people live within 500 metres of a railway.’

‘The audit identifies these groups, then maps them against our work programmes and big projects, so we can talk to them in advance about work that will affect them,’ he explains.

As a quasi-public sector company, decisions about Network Rail’s funding are made every five years, but the process of persuading those who make the decision takes about two and a half years.

‘Our approach has become more sophisticated, it is a lot more targeted. Through mapping and auditing we understand who makes the decisions.

‘Previously, there may have been a ‘one size fits all’ approach. Now there is more tailoring of the messaging, because different audiences have differing wants,’ Groves says.

The responsibility for dealing with stakeholders has also moved beyond the traditional media relations and public affairs team to the operations management, in particular route managers and the finance team.

‘Media relations and public affairs has gone down the pecking order to some extent, because stakeholder relationship management has taken over. That is because of a better awareness and understanding of what impacts and effects the reputation of a company can have.’

Five years ago, commuters petitioned former Prime Minister Gordon Brown to strip First Capital Connect of its Thameslink franchise, which runs from Bedford to Brighton, in the wake of severe timetable disruption, delayed and cancelled trains and customer misinformation. As part of its efforts to shake off this image, First Capital Connect provided all the new MPs in the last Parliament with a booklet explaining its services and a dedicated, named contact whom they could approach to talk about anything.

‘It was seen as critical to rebuilding their reputation. Good stakeholder engagement is like maintaining your house. If you wait until it is falling down, then it will be very expensive to repair,’ another transport sector expert says.

Jim Donaldson, managing director of Fleishman Hillard UK, believes there have been three vital changes that have made stakeholder engagement more necessary and also more successful.

The first is that companies are prepared to engage with people who disagree with their point of view. Food and drink companies have talked to dietitians and health practitioners, while energy companies have engaged with environmental activists.

‘People have finally realised that ignoring influencers is no good. This is partly because you can’t just go and lobby MPs and ignore the rest. Companies are also prepared to put their head above the parapet more,’ he says.

There is also recognition that arguments or influence can not be restricted to one geographical area. Influence pervades borders. ‘A lot of the big issues that clients want to engage people on are truly international. The regulatory environment across borders may be different, but the opinion formers are conjoined,’ he says.

Finally, Donaldson identifies that the era of Corporate Social Responsibility as a type of philanthropy or insurance policy is over. ‘It’s no longer about cheque book engagement.’

Organisations now realise that they need to have a point of view and senior people who are prepared to be responsible for that. Diageo, which was formed 17 years ago by the merger of Guinness and Grand Metropolitan, now operates in 180 countries. The maker of Johnny Walker scotch and Smirnoff vodka recently formed a global Brand Diageo team, in recognition that stakeholders around the world are now connected and can communicate with each other in seconds.

Dominic Redfearn heads up the initiative after eight years in various roles in Diageo’s communications team. ‘When Ivan Menezes became chief executive almost two years ago, he said that he wanted Diageo to be the best performing, most trusted and respected consumer product company in the world. Brand Diageo has been created to make sure that all the staff, in businesses around the world, understand who we are, what we do and what we stand for.’

The Brand Diageo team is effectively trying to protect, and promote, the company’s good name, which is particularly critical since a string of acquisitions has brought so many new people of different cultures and backgrounds into the company.

For all the recognition that stakeholder engagement is now a business essential, there are some problems with the way it is carried out, Donaldson says. Too often, the stakeholder strategy is not aligned to the company’s business objectives. Like old fashioned communications, it can be reactive, instead of proactive.

The use of research and analytic tools to monitor who really has influence and who it is worth communicating with is not as commonplace as you might expect. Donaldson says: ‘We want to use data and analysis but we still get clients who come in and ask Do you know these four people?’

The role of employees as stakeholder advocates is also becoming more important. Companies like Diageo, which now require their employees to drink responsibly as part of their employment contract, are realising that their employees are their biggest resource of influencers and can often be the best advocates for the company.

Finally, there is the question of money. There may not be a specific budget line for stakeholder engagement, but increasingly resources will be found from marketing or media budgets.

Determining whether a stakeholder campaign is working is invariably a mix of analysis and judgment. It is possible to track awareness, attitudes and sentiment through quantitative and qualitative perception research.

For McDonald’s UK, it may prove impossible to entirely eradicate the sense of a dead-end job from the term McJob. But in the words of their enduring ad campaign, key stakeholders – skills organisations, Government, and influencers like entrepreneur and former Dragon’s Den participant James Caan - are already Lovin’ it.